Seventh Circuit case demonstrates value of good time reporting procedures

Police officers in the Chicago Police Department claimed in a recent case that they were not compensated for work they performed on their mobile electronic devices — specifically, their BlackBerrys — while off-duty. A total of 52 officers sued the city under the Fair Labor Standards Act (FLSA) for unpaid overtime. Following a six-day trial, the court found in favor of the Chicago Police Department after determining that the department did have a procedure in place for officers to submit payment requests for off-duty work, that the department did not prevent the officers from requesting payment for non-scheduled overtime work on their BlackBerrys, and that the department did not know the officers were not paid for such work.

The BlackBerrys were issued by the police department to the officers, who sometimes used the devices to perform work outside their scheduled shifts. The department had a process that officers used for overtime compensation, in which officers submitted “time due slips” to their supervisors. After the supervisors approved the time slips, the slips were then sent to payroll to be processed. Collectively, the 52 police officers reported and received pay for 3,000–4,000 overtime hours each year from 2011–2014. During this time, however, many of the officers did not submit time slips for off-duty work performed on their BlackBerrys and did not receive pay for some of their off-duty BlackBerry work.

The officers appealed the judge’s ruling, and the Seventh Circuit Court of Appeals affirmed the judge’s decision. The appeals court stated that the central question was whether an unwritten police department policy prevented or discouraged officers from submitting the slips. While the facts showed that some of the officers sometimes worked off-duty on the BlackBerrys and did not report all of this work on the “time due slips,” the supervisors who revised and approved the slips did not know that the plaintiffs were not being paid for that work.

The appeals court reviewed the evidence the plaintiffs presented to support their claim that there was an unwritten policy not to compensate officers for off-duty BlackBerry work. The court listed four categories of evidence: (1) there was a widespread belief that officers should not turn in slips for BlackBerry work; (2) written policies to that effect; (3) pressure to reduce overtime in general; and (4) pressure not to seek compensation for BlackBerry work in particular.

On the first category, the court noted that many officers did submit slips for off-duty BlackBerry work and were compensated for such work. Some of these slips were approved by supervisors who knew the “time due slips” were for off-duty BlackBerry work. There was no evidence that officers were disciplined for submitting time slips for off-duty BlackBerry work.

On the second category, the department had a general order stating that officers were not required to use BlackBerrys or other personal digital assistants while off-duty. Another general order also contained a guideline that officers not use BlackBerrys while off-duty, except while on a “call-back” assignment or if a supervisor authorized overtime for the work. While these orders were emphasized by the plaintiffs and concerned the Seventh Circuit, the evidence showed substantial confusion among officers as to the meaning of the general orders and inconsistent testimony from officers about whether the general orders were followed.

On the third and fourth categories, the evidence showed the department at times tried to reduce the officers’ overtime, but that these efforts were unsuccessful. Total overtime did not decrease, and the overtime paid to the plaintiffs themselves actually increased. The evidence showed that supervisors did not deter officers from submitting time slips for off-duty BlackBerry work.

In their appeal, the plaintiffs argued that the police department knew or should have known the officers were underreporting their off-duty BlackBerry work. The appeals court quoted the definition of “employ” from the FLSA as “to suffer or permit to work.” The appeals court also noted that this definition helped prevent employers from evading the law by issuing formal written policies limiting overtime but are then widely violated, or who might deliberately look the other way on overtime work their employees are doing. Employers cannot accept work without compensating employees for their work, even if the employer has rules against overtime work, the court noted. If an employer does not want to pay overtime, then management must exercise its control and see that the work is not performed, the court added.

According to the appeals court, the FLSA stops short of requiring the employer to pay for work that the employer “did not know about, and had no reason to know about.” The Seventh Circuit agreed with the trial court’s factual findings that the plaintiffs failed to show that the Chicago Police Department knew about or should have known that officers were not reporting time for off-duty BlackBerry work and affirmed the judgment in the department’s favor.

Citing other court cases, the appeals court provided guidance for employers in preventing employees from working off-the-clock and in dealing with claims of uncompensated work. The court stated that an employer can show that it exercised diligence to find out about uncompensated work “by establishing a reasonable process for an employee to report uncompensated work time.” This process could include a form for employees to record their time, like the “time due slips” in the case.

Employer lessons

It is important to remember that whatever process, policy or form that an employer chooses for time reporting will still not insulate the employer from paying for uncompensated work if the employer prevents or discourages employees from accurately recording and reporting their work time. In such a case, employees could show that the employer knew or should have known about off-duty uncompensated work.

Upshot of this case: Employers should have a clear policy on work time and time reporting. The policy should include a statement that employees will be paid for all time worked. The policy also should contain clear limits on employees working off-the-clock, such overtime work must be authorized by a supervisor. Employers also should have time reporting procedures that permit employees to claim time if the employees work outside their regularly scheduled work hours. Finally, as part of broader training on wage and hour issues, employers should train supervisors that they must encourage, and not discourage, employees to report all time worked.